US Airways Workers OK Contract Give Backs

Published 7:00 pm, Thursday, January 9, 2003

Members of unions representing US Airways flight attendants and communications workers narrowly ratified a second round of concessions Friday to stave off possible liquidation of the bankrupt airline.

Both votes, by members of the Association of Flight Attendants and the Communications Workers of America, were tight, with flight attendants approving the concessions by 55 percent and the communications workers approving the deal by only five votes.

The AFA represents more than 7,500 flight attendants, while CWA represents about 6,300 reservations agents, gate workers and other passenger service employees.

Last year, the 32,000 employees of US Airways agreed to annual concessions of $840 million a year as part of the airline's plan to cut costs by $1.2 billion a year. But the airline later revised its plans, saying continued weakness in the industry required unions to make an additional $200 million in givebacks.

US Airways' president and chief executive officer, David Siegel, praised the employees for their sacrifices and contributions.

"Our flight attendants have shown great judgment in ratifying this cost-cutting agreement," Siegel said in a statement. "The support of our restructuring brings us that much closer to emergence from Chapter 11."

Jeff Zack, spokesman for the flight attendants' union, said their agreement adjusts work rules and increases the amount employees must pay for benefits. It could lead to more job cuts, he said, but also could save the airline another $26 million annually.

Cuts for the communications workers could save the airline another $15 million annually, the airline has estimated. Neither the union nor the airline released specifics of the deal, which was reached with CWA officials last month.

Last August, Arlington-based US Airways became the first airline to declare bankruptcy as a result of the downturn in the travel industry following the Sept. 11 terrorist attacks.

The airline lost $2.1 billion in 2001 and $852 million in the first three quarters of 2002.

Officials said the company said it needs to cut costs by $1.6 billion to remain viable. The airline filed a reorganization plan in federal bankruptcy court in December, which hinges on the airline securing a $1 billion federal loan guarantee, a $240 million investment from the Alabama state pension fund and concessions by the airline's employees.